CBA shares have picked up another sell rating, and this time the reasoning has a lot to do with the housing market in general.
Commonwealth Bank of Australia (ASX: CBA) are at $158.93 at the time of writing.
That values the country's largest lender at roughly $265.7 billion.
The shares have fallen about 5% over the past twelve months.
Nowadays, three separate experts think there is further to go.
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Why a broker is calling sell on CBA shares
Remo Greco of Sanlam Private Wealth has the bank rated as a sell.
He is not the only one.
Tony Locantro of Alto Capital and John Athanasiou of Red Leaf Securities both issued sell ratings in late August.
Greco was direct about what worries him.
Investors may want to consider cashing in some gains until a clearer picture emerges about the state of Australia's housing market, the outlook for interest rates and the broader outlook for credit growth moving forward.
Athanasiou made a slightly altered version of the same argument.
Australian banking remains a mature industry, with intense competition across mortgages and deposits limiting the potential for outsized earnings growth.
What the FY26 result actually showed
However, the financial numbers were not the problem.
CBA delivered cash net profit after tax of $10,982 million in FY26, an increase of 7%.
Revenue also rose 7% to $30,153 million, and the net interest margin held steady at 2.05%.
The fully-franked dividend reached $5.05 per share across the year.
Home loans more than 90 days in arrears stood at 0.73%, while the loan impairment expense rose 9% to $788 million.
That is a good result from a very well-run bank.
It is also mid-single-digit growth, which matters once you look at the price being asked for it.
The valuation problem
CBA trades on a price-to-earnings (P/E) ratio of around 24.3 and yields around 3.2%.
In contrast, ANZ Group Holdings Ltd (ASX: ANZ) trades on 19 times earnings and yields 4.45%.
An investor is paying nearly 30% more per dollar of earnings at CBA while receiving notably less income for the privilege.
The premium has been justified for years by better technology, a stronger deposit franchise, and lower funding costs.
The question is whether those advantages are worth quite this much when profit is growing at 7%.
What could go wrong for CBA shares?
The housing cycle is the immediate risk.
Home loan applications have fallen roughly 15% since the May Federal Budget.
National home values dropped 0.9% in August and now are 3.6% below their March peak.
Australia's 10-year government bond yield has reached around 5.19%, its highest level in 15 years.
ANZ now expects the Reserve Bank to lift the cash rate by 25 basis points to 4.60% in November.
A higher cash rate widens deposit margins, but it also slows credit growth and pushes arrears higher.
The case for staying put
CBA remains the highest quality bank in the country by some distance.
The company's deposit base is unmatched, its technology spending is years ahead of its peers, and its credit book has already absorbed one full rate cycle without trouble.
Arrears of 0.73% are elevated but not all that alarming.
Foolish takeaway
CBA shares are not expensive by accident.
The market pays a premium because the bank has consistently earned one.
The real question is whether 24 times earnings is sensible for a business growing profit at 7% a year in a slowing housing market.
On balance, I think the risk now sits with the buyer rather than the long-term holder.
Trimming an oversized position looks reasonable, though I would not sell CBA shares outright on the strength of a broker note alone.
